RF ready to assist Cyprus, though EU should be the first to deal with problem – Medvedev

Russia is ready to consider any suggestion on assistance to the Cyprus economy, including deployment on the island of a military naval base

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GORKI, March 21 (Itar-Tass) – Russia is ready to consider any suggestion on assistance to the Cyprus economy, including deployment on the island of a military naval base, but first of all the European Union should be settling the problem, Russia’s Prime Minister Dmitry Medvedev said in an interview with European media.

“Cyprus is a member of the EU, and the EU presents its suggestions. We have initially agreed with the European counterparts: they are offering measures to restore Cyprus’ solvency /the situation is not simply grave, it is top grave/, we are considering suggestions from the European counterparts and then we should think whether we should be doing anything or not,” the prime minister said.

Medvedev mentioned a loan of 2.5 billion dollars to Cyprus several years earlier.

“Thus, we have been participating in the so-called support of Cyprus’ liquidity and solvency.”

Medvedev stressed that at the same time Russia did not object to discussing further aid.

“What form may it be? Today /March 20/ our counterparts /Cyprus ministers/ have arrived and offered a set of suggestions, including a set of assets, which, they believe, Russia could buy. But the order /of actions/ is as follows – first, suggestions from the EU, and they should rather comply with the norms of civilised life and with the norms of international law and those of the domestic legislations – constitutions of countries involved, civil codes, which guarantee inviolability of property. Following that, we shall make our suggestions. As yet, we have not heard anything super new,” the prime minister said.

While responding to a question from reporters if Russia could buy gas deposits in Cyprus, Medvedev called the question “not simple.”

“First of all, I do not realise the cost, and, secondly, there are problems with Turkey there. Thus, the question is not easy for discussions,” he explained.

Another suggestion, voiced by the reporters, was about deployment of Russia’s naval base in Cyprus.

“We are ready to discuss different variants. Anything discussable,” the response was. “The problem of Cyprus should be settled by Cyprus itself. The problem of Cyprus should be settled by the EU, since Cyprus is a part of the EU. And only thirdly settlement of Cyprus problems may involve other countries, which for various reasons have certain interests there.”

Medvedev characterised the situation in Cyprus as very complicated. “Whatever decision is made – to seize parts of deposits, which in my opinion looks like a robbery, or not to seize – the money will be fleeing from Cyprus, and the banking system will be affected.”

“If this is the purpose of the EU decisions, then those decisions are very strange. Anyway, negative consequences are to follow for sure. Now the thing is how to minimise them – both for Cyprus and for the entire international financial system,” the prime minister said.

He is sorry about the negative impact on the international financial system: “Over several years we have been trying hard to structure it, we have been reviving the trust inside. I can remember all those endless discussions at the G-20, at the G-8 that the most important thing is trust, that trust should be restored. Here we are now! Destroying is easy, but then years will be spent for the restoration.”

Medvedev says that the Cyprus situation is “a reason to think twice.”

“If this /seizure of deposits/ is possible in Cyprus, then why would it not be possible in Spain, in Italy, in some other countries, which are facing financial problems? Tomorrow, deposits will be confiscated there,” he warned.

The Russian prime minister said that Russia as yet had not changed its currency policy and still kept about 41-42 percent of its currency reserves in euro.

“But for us, like for any other country, predictability is most important. What has been done was unpredictable, and it is a proof of a certain inadequacy,” Medvedev said. He added that on Thursday during a meeting in Moscow with Chairman of the European Commission Jose Manuel Barroso he would express all the concerns.

Dmitry Medvedev called an exaggeration the rumours about huge “secret” deposits in Cyprus, belonging to Russian individuals and companies.

“The deposits, which are of a specific character and which prove the grey routes of exporting money from Russia – those are not that big as they are spoken about,” he said adding “this is an issue to be verified.” He is sure “a huge number of public companies have accounts /in Cyprus/, as it is convenient due to various reasons.” “For the Russian state it would be top important that they /Cyprus authorities/ presented all this information /on illegal money/ so that those who took the money from our economy could be brought to responsibility. Perhaps, they would return the money. Generally, this campaign could favour us, and some money would come back.”

He stressed the capitals transferred illegally should be looked into. “We are only for it. We meant it as we started speaking about de-offshoring of the international life. By the way, it is worth analysing Cyprus, as well as other locations, in the world there are many special jurisdictions, and it is necessary to see, whether the BVI, for example, are better than Cyprus or worse, or the Bahamas or what not. There should not be double standards, or at some point we shall have to make a decision to organise an offshore zone. Then, the capitals will be inflowing with pleasure. Speaking about a more transparent situation – we are for it, the most important is that remains as non-violated the normal existence of the financial system, as we have many open public structures working via Cyprus,” the prime minister said.

Medvedev said those public structures’ “money is blocked now for unclear reasons, though the source of that money is evident, that money had been presented everywhere, those are state structures.” “Thus, we have to follow a rather tough position towards the events around Cyprus and the settlement of its debts.”

The prime minister did not agree with the wording of the question – why German tax payers have to rescue Russian accounts in Cyprus.

“I do not think the question may be put this way – why we should be paying for somebody. The question should be: are we abiding by the rules at all or not? Why did we compose banking rules or international conventions, why are we participating in the International Monetary Fund and why are we discussing development of an international financial system? I believe, so that it is clear, transparent and civilised. Thinking it is a payment for some Russian deposit owners is as correct as thinking it is a payment for some British deposit owners – they are also numerous there, the number is to be verified,” the Russian prime minister said.

“It is idle talk, which unfortunately comes from emotions, not from the understanding of a real problem,” he said.

“And it is clearly is that breaking the financial balance is easy, and restoring it is top complicated. This is what everyone should remember – both the decision-makers in the EU countries, and the separate tax payers living in the European Union,” Medvedev said in conclusion.